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1. DMPA expansion contracts-these amounts represent the estimated net costs to
the Government. The gross value of the contracts let greatly exceed these amounts
(see Defense Production Act Borrowing Authority Quarterly Report to the Congress).
2. Advances and loans are recoverable with no losses anticipated. Amounts are
cumulative and exclude repayments to date.

3. Tax-amortization certificates have been listed where the amount certified could be identified with a single material. The report received from ODM also includes the following certifications for groups of materials:

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4. This report does not include assistance given for agricultural-type commodities such sisal, abaca, palm oil, etc., which are on the official stockpile list.

5. The Department of Defense report was negative. Copy of their letter of July 11, 1953, is attached.

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1 Cancellation of lead development project, obrted prior to July 1, 1950.
"Railway and port facilities for handling strategic materials; $14 million of counterpart
advance is repayable in copper.

GENERAL NOTES

1. DMPA expansion contracts-the amounts reported represent the estimated net
cost to the U. S. Governine... The gross value of the contracts let greatly exceeds this
amount (see Defense Production Act Borrowing Authority Quarterly Report to the
Congress).

2. Loans and advances are recoverable with no losses anticipated. Amounts are cumu-
lative exclusive of repayments.

3. The Defense Department report was negative. Copy of their letter of July 11, 1953,
is attached.

4. The MSA-ECA report includes all projects financed by those agencies: (a) contracts
transferred to DMPA, (b) contracts retained by MSA-ECA, and (c) DMPA projects
financed with MSA funds. There were no "3d country" obligations as of Mar. 31, 1953,
as all obligations occurred after that date.

5. Tax amortization certificates issued for foreign facilities were as follows:

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6. This report does not include procurement for the national stockpile.

3

333

10

$253, 950
19,496
3, 155

276, 601

Senator MALONE. We will recess for lunch and come back at 2:30. At that time we will go into the domestic developments, copper first and lead-zinc, and any other material advancements or contracts that have been made.

(Whereupon, at 1:40 p. m., the subcommittee recessed, to reconvene at 2:30 p. m., the same day.)

AFTER RECESS

Senator MALONE. The committee will be in order.

We have not yet started on the domestic contracts, so I think we will ask you, Mr. Walsh, and you feel free to call on any of your associates for supplemental information, to complete the foreign contracts by commodity. We had completed the copper, as I understood you, before.

Mr. WALSH. Yes, sir.

LEAD AND ZINC

Senator MALONE. We were on lead and zinc. Suppose we complete the lead and zinc. That would include all foreign contracts. If there are contracts over which you had no jurisdiction, refer to them, and we will ask for the information, if it is necessary. Start with your lead and zinc, if you have completed the copper. You can be very brief. The information we will require for the record is the date of the contract, the amount of material it calls for, over what period deliveries are to be made, grade of material, the amount of money advanced by any Government agency and under what conditions, whether it is an interest-drawing loan or as a subsidy; whether it is subject to an escalator clause or whether it is a firm contract, what guaranty you have of getting the metal especially where you are advancing the money.

Mr. WALSH. Yes, sir. Lead. There is one open contract on the stockpile for delivery of lead. That contract is with the Compania Minera de Huehuetenango. The source of supply on that is Guatemala. The contract calls for 9,750 tons of lead which is delivered to this country in the form of bullion and then converted into metal by the American Metal Co. through their smelting facilities. I do not have the date of the contract. However, the scheduled deliveries under that contract call for delivery to begin on February 23, 1953, and to be completed by February 23, 1955. To date a total of 1,022 tons of material have been delivered. No funds were advanced and material is paid for only if and when delivered. That is the only open contract on lead.

Senator MALONE. What price?

Mr. WALSH. The prices on that, sir, are 17.342 cents per pound.
Senator MALONE. Of contained lead.

Mr. WALSH. That is for lead itself, as I interpret these figures.
Senator MALONE. It is ore you are shipping in?

Mr. WALSH. Yes, sir, but we are paying for the lead only.

Senator MALONE. Per pound of contained lead.

Mr. WALSH. The per pound of contained lead, there is a floor price

and a ceiling price. The floor price is 17.342 cents per pound.

Mr. ADLERMAN. May we have the contract number on that?

Mr. WALSH. SCMTS12496. It has a floor price of 17.342 cents per pound and a ceiling price of 20.342 cents per pound.

Seantor MALONE. How do you arrive at the figure in thousands of a cent?

Mr. WALSH. I cannot answer that from memory, sir. The file would show that, and I will be glad to submit the contract for the record.

Senator MALONE. What does it cost to smelt this material?

Mr. WALSH. The smelting cost is contained in here. What it is, I really do not know.

Senator MALONE. In other words, the producer of the ore pays for the smelting.

Mr. WALSH. Yes.

Senator MALONE. Transportation here and delivery of the lead where?

Mr. WALSH. At a smelter in the United States.

Senator MALONE. And you pay the freight of the lead or transportation to your stockpile, whereever you stock it?

Mr. WALSH. Yes, sir.

Senator MALONE. 650,000 tons.

Mr. WALSH. No, sir. It calls for a total of 9,750 tons.
Senator MALONE. Of lead?

Mr. WALSH. Yes, sir.

Senator MALONE. Lead content.

Mr. WALSH. Yes, sir, of which 1,022 have been delivered.

Senator MALONE. What determines the price? You have a floor and you have a ceiling.

Mr. WALSH. I am sorry I could not tell you without referring to the file.

Senator MALONE. Will you do that?

Mr. WALSH. Yes, sir. If you wish we would be glad to give you the contract.

Senator MALONE. I think it would be a good idea if you just numbered these contracts exhibits in consecutive numbers and gave us a copy of all the contracts that you describe, but fill in your testimony before the reporter completes it, the pertinent details. That is how you fix the price in this case.

Mr. WALSH. Yes, sir.

(The information is as follows:)

Hon. GEORGE W. MALONE,

EXHIBIT No. 5

GENERAL SERVICES ADMINISTRATION,

EMERGENCY PROCUREMENT SERVICE,
Washington 25, D. C., October 16, 1953.

Chairman of the Minerals, Materials, and Fuels Economic Subcommittee, Committee on Interior and Insular Affairs,

United States Senate, Washington 25, D. C.

DEAR SENATOR MALONE: There is furnished below information covering contract SCM-TS-12496 with Compania Minera de Huehuetenango, S. A. of Edificio Passarelle, 5 Avenida 11 Calle, Apt. Postal No. 523, Guatemala, Guatemala, C. A. The company also has an office at 2401 Gulf Building, Houston 2, Tex.

This contract was entered into February 23, 1949, after negotiations extending over several months. The contract calls for the delivery of 9,750 short tons of pig lead.

39888-54-pt. 2—21

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